Exclusive: Seibu to seek Tokyo listing, ends spat with Cerberus: sources

Tue Jan 14, 2014 3:22am EST
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By Taro Fuse and Emi Emoto

TOKYO (Reuters) - Seibu Holdings Inc and top shareholder Cerberus Capital Management LP CBS.UL will seek to relist the Japanese company in the coming months, sources said, allowing the U.S. investor to cash out most of its $1 billion-plus investment and ending a spat seen as a test of Japan's openness to foreign capital.

The embattled railway and hotel group will seek a public offering on the Tokyo Stock Exchange early in the financial year starting in April, people familiar with the matter told Reuters on Tuesday.

The listing ends a public feud that had included a failed bid by the U.S. private-equity firm to put former U.S. Vice President Dan Quayle on the Seibu board as part of its fight to gain more clout.

Cerberus stands to make a tidy profit from what would be a multibillion-dollar listing, a rare victory for foreign investors in tradition-bound Japan. Seibu may file an application for the sale as soon as Wednesday, the sources said.

The listing has been made possible by the stock market boom spurred by Prime Minister Shinzo Abe's monetary and fiscal stimulus that allowed Seibu to return to financial health and not because it caved into the demands of Cerberus.

The 78 percent surge in Tokyo shares since Abe's election campaign began in earnest 14 months ago has unleashed a rash of market fund-raising, including the $4 billion July listing of Suntory Beverage and Food Ltd (2587.T: Quote), Asia's largest of the year.

"In a way, without this market recovery, the fund could not have exited," said Japan corporate-governance advocate Nicholas Benes. It is not clear if the currently unlisted Seibu has taken steps to improve governance, but it is "logical" for Cerberus to cash out some of its investment, said Benes, who heads the Board Director Training Institute of Japan.

Cerberus will sell about 20 percent of the company, more than half its 35.48 percent holding, the sources said. The agreement follows an overnight teleconference between Seibu President Takashi Goto and Cerberus Chief Executive Stephen Feinberg, they said.   Continued...

A crewman works inside a train coach of Seibu Railway Co., railway service unit of Seibu Holdings, at a station in Tokyo June 25, 2013. REUTERS/Issei Kato